Monday Study – The Fight To Get Solar Right Goes On
The 50 States of Solar: Q3 2022
October 2022 (North Carolina Clean Energy Technology Center)
OVERVIEW OF Q3 2022 POLICY ACTION
In the third quarter of 2022, 40 states plus DC took a total of 174 actions related to distributed solar policy and rate design (Figure 1). Table 1 provides a summary of state actions related to DG compensation, rate design, and solar ownership during Q3 2022. Of the 174 actions cataloged, the most common were related to DG compensation rules (58), followed by community solar (46), and residential fixed charge and minimum bill increases (28).
TOP FIVE SOLAR POLICY DEVELOPMENTS OF Q3 2022
Five of the quarter’s top policy developments are highlighted below.
Mississippi Regulators Adopt Revised DG Compensation Rules
The Mississippi Public Service Commission approved revised DG compensation rules in July 2022, with further amendments made in an October 2022 order. The revised rules expand eligibility for the low-to-moderate (LMI) income benefits adder from 200% to 225% of the federal poverty level, create new upfront incentive programs for LMI customers and residential battery storage, and establish a solar for schools program, among other changes.
California Lawmakers Enact Legislation to Expand Community Solar
The California State Legislature enacted A.B. 2316 in September 2022, which directs the California Public Utilities Commission to evaluate customer renewable energy subscription programs and determine by March 31, 2024 whether it would be beneficial to ratepayers to establish a Community Renewable Energy Program. The legislation requires that 51% of program subscribers be low-income customers or low-income service organizations.
Virginia Corporation Commission Establishes Minimum Bill for Community Solar Participants
In July 2022, the Virginia Corporation Commission approved a monthly minimum bill of $55.10 for participants in the state’s new shared solar program. Notably, the Commission exempted low-income customers from the minimum bill. Regulators granted a motion for reconsideration that urged the Commission to approve a different option that would set the minimum bill at $10.95, but the Commission later upheld the higher charge.
North Carolina Regulators Authorize Third-Party PPA for Military Facility
The North Carolina Utilities Commission issued a declaratory ruling in August 2022, allowing a power purchase agreement (PPA) between Sunstone Energy and Fort Bragg to move forward under the proposed third-party ownership structure. The Commission found that since Fort Bragg is on federal land, federal law applies and the Commission may not regulate Sunstone Energy as a public utility.
Illinois Commerce Commission Approves Long-Term Renewable Resources Procurement Plan
Illinois regulators approved the state’s 2022 Long-Term Renewable Resources Procurement Plan in July 2022. The plan provides guidelines for the state’s renewable energy incentive programs, including those for community solar. The plan implements changes enacted in the Climate and Equitable Jobs Act of 2021, including requirements related to equity. The plan includes new funding categories specific to public schools, community-driven projects, and “equitable eligible contractors”.
THE BIG PICTURE: INSIGHTS FROM Q3 2022
States Tying Labor Requirements to Solar Programs
As states continue to evaluate their distributed solar programs, policymakers in some states are tying new labor requirements to these programs. At the federal level, the recently enacted Inflation Reduction Act requires that laborers are paid prevailing wages for new projects to receive the full 30% business investment tax credit. In California, legislation enacted in September 2022 requires that net metering systems over 15 kW installed after December 31, 2023 meet the labor standards for public works projects, including prevailing wage requirements. New Mexico’s new community solar program includes bid preferences for projects employing local labor and including workforce training opportunities, while Illinois’ Adjustable Block Program requires that most project proposals comply with Illinois Prevailing Wage Act rules.
Policymakers and Regulators Examining Improvements for Next Iterations of Community Solar Programs
In several states, policymakers and regulators are examining potential improvements to community solar programs to be implemented in future iterations of these programs. California lawmakers enacted legislation in September 2022 that is intended to address policy barriers that have inhibited the growth of community solar in the state. In Maryland, the Public Service Commission submitted a report to the state legislature with recommendations regarding the future of the state’s community solar pilot program, and the New Jersey Board of Public Utilities has been working to develop a straw proposal for a permanent community solar program to succeed its pilot. Meanwhile, stakeholders in Maine have been meeting to discuss potential changes to the state’s distributed generation programs, including community solar, while Connecticut regulators evaluate potential changes for Year 4 of the shared clean energy facilities program.
States and Utilities Considering the Resilience Value of Distributed Solar
A number of states and utilities are considering the potential resilience value that distributed solar can offer as a part of customer programs. The Georgia Public Service Commission approved Georgia Power’s proposed Resilience Asset Service Tariff in July 2022, which will allow the utility to deploy distributed energy resources, including solar and battery storage, at commercial and industrial customer locations in exchange for a monthly resiliency service charge. In New Hampshire, resilience services is one of the avoided cost components analyzed by the state’s forthcoming value of distributed energy resources study. Additionally, Connecticut regulators have considered the potential for bid preferences in the shared clean energy facilities program for projects delivering measurable resilience benefits.